The American Spectator : The Spectacle Blog : Boy Clinton Says Don't Blame Me

Text Size

The Spectacle Blog

Boy Clinton Says Don't Blame Me

By W. James Antle, III on 2.17.09 @ 8:50AM

Bill Clinton is steamed about his inclusion on Time magazine's list of 25 people who contributed to the current economic crisis. Though Clinton is in good company, with Alan Greenspan and George W. Bush, he rejects the dubious honor and makes a rather audacious claim of his own: "My question to them is: Do any of them seriously believe if I had been president, and my economic team had been in place the last eight years, that this would be happening today? I think they know the answer to that: No."

Really? It was Clinton who "reformed" and stepped up enforcement of the Community Reinvestment Act in 1995. This loosened lending requirements for low-income borrowers who could not afford their mortgages, helping to build up the housing bubble. As Steve Sailer and others have pointed out, CRA dollar commitments climbed from $8.8 billion from 1977 to 1991 all the way to $4.2 trillion from 1992 to 2005. Clinton also adopted a CRA-like stance toward government-sponsored enterprises like Fannie Mae and Freddie Mac, presiding over a fourfold increase in their balance sheets in 1997 and 1998 alone. Finally, Clinton was a fairly reliable booster of loose monetary policies throughout the 1990s.

Clinton arguably does get a bad rap for the repeal of the Glass-Steagall Act through signing Gramm-Leach-Bliley in 1999. Without that legislation, it would have been illegal for J.P. Morgan Chase to have bought Bear Stearns or for Bank of America to buy Merrill Lynch. The probable result would have been even bigger taxpayer bailouts. Also, the Boston Consulting Group and other analysts have argued that diversification wasn't the main thing that got banks into trouble and was in some instances helpful. All that said, it is nice to be reminded that Clinton played a bigger role in the deregulation of banking than any recent Republican president.

While Greenspan's legacy has been taken down a peg by the financial meltdown, there has been greater reluctance to reassess Clinton's economic management. He is remembered, especially by voters, as an architect of economic growth, low unemployment, and huge budget surpluses while the name Bush is often associated with recessions, lost jobs, and big deficits. But Clinton has taken a lot of credit for bubbles that have only burst under his successors' watch and deserves his share of criticism too.

View all comments (12) | Leave a comment

Al| 2.17.09 @ 10:18AM

The democrats have had congressional majorities for over 70 years and have had White House control for a few of those also. How can they keep blaming republicans and anyone else for that matter. They've had the power the longest and have done NOTHING!

Jerome Brick| 2.17.09 @ 10:46AM

Au contraire, I would have to rate repeal of the Glass-Steagel Act in 1999 as one of the primary contributors of the banking crisis we are now experiencing. One of the bedrock principles of sound banking - that a Federally insured commercial bank cannot act as a surety for third party debt without disclosing such liability directly on its books - was eliminated when Glass-Steagel was repealed.

This allowed commercial banks such as Citibank to create such monsters as SIVs (Special Investment Vehicles) and Credit Default Swaps that enabled the bank to use its good credit rating to provide real or implicit guarantees to the debt of questionable third parties who could not otherwise obtain such credit on their own merits.

Repeal of Glass-Steagel opened a pandora's box that has exposed our largest commercial banks to enormous contingent liabilities that in all probabilty has rendered them insolvent. In fact their insolvency is beyond the capabilities of the FDIC that insures the deposit liabilities of these institutions and now must be rescued directly by the U. S. Treasury.

W. James Antle III| 2.17.09 @ 11:23AM

The Commodity Futures Modernization Act of 2000, also signed by Clinton, had more to do with the proliferation of Credit Default Swaps than Gramm-Leach-Bliley. Though the latter does have a lot to do with Special Investment Vehicles. I'm still mulling over my position on Gramm-Leach-Bliley and its place in the financial mess. After all, Ron Paul voted against it.

BD57| 2.17.09 @ 4:23PM

"Clinton takes credit for everything good, blames others for everything bad."

A headline up there with "Dog bites man."

ruth| 2.17.09 @ 6:11PM

Ugh. Clinton is the proverbial bad penny.

TV Jarratt| 2.17.09 @ 6:29PM

Bill Clinton – “Don’t Blame Me!”

You can blame Bush, Greenspan or AIG,
But, for goodness sake, don’t blame me!
I exempted derivatives and swaps from regulation,
But don’t blame me for the ensuing conflagration!
Laws I pushed loosened rules on housing,
But don’t blame me for the economic dowsing!
I killed commercial and investment banking separation,
But don’t blame me for the finances of the nation!
I take credit for all the good we had,
But don’t blame me for anything bad!

Kat| 2.17.09 @ 6:43PM

And of course, 9/11 was all Bush's fault.

Glaivester| 2.20.09 @ 6:21PM

On the other hand, Clinton's CRA-boosting is rather moderate compared to that under Bush, as Steve Sailer's graph shows.

ruth| 2.21.09 @ 1:04AM

Clinton turbocharged Carter's CRA, it's the liberals' monster; not Bush's.

Ark| 2.21.09 @ 1:44PM

Both parties are corrupt beyond repair. Derivatives were illegal under the New Deal. Reagan legalized them in 1982. After that anti-usury laws and other
provisions were gradually dismantled by both parties. The process was completed by 2000 when Glass-Steagall was repealed - with solid bipartisan support. The repeal was signed by smiling Clinton. "Great Depression 2" was a matter of only 8 years.
Obama was asked only once about Glass-Steagall and he said he wants it to stay repealed. Meet the new boss... same as the old boss.

Frosty| 2.21.09 @ 7:47PM

Liberal social engineering led to the financial debacle. Socialism never works, never has, and will destroy our country. The democrats are responsible.